Watchdog calls for new Telecom Act


David HonigMMTC President David Honig said that the communications industry of today involves things that weren’t even commonly-used terms yet when Telecom 1996 was passed. And a related problem is an FCC that moves at an industrial pace in a digital world. He had a wide range of suggestions.

Honig was particularly concerned about broadband adoption among minorities, and tied incentive auctions to that concern, because wireless broadband is one of the more widely-used methods of access among minority communities, making a spectrum shortage an alarming possibility.

He was also concerned that the situation of minorities in heritage broadcast platforms is moving in the wrong direction, despite years spend considering remedies. He noted gains in ownership and employment being reversed.

He was also concerned about the glacial pace of action at the FCC, and said he believed incentive auctions were still five to seven years in the future.

Here are Honig’s full remarks as delivered at the organization’s 10th Annual Access to Capital and Telecommunications Policy conference, as published in the organization’s Broadband and Social Justice newsletter.

Honig’s remarks begin here:
I’m so glad that several distinguished Members of Congress have joined MMTC for our 10th Annual Access to Capital and Telecom Policy Conference. And today I have the privilege of encouraging Congress to take dramatic steps to bring telecom regulation into the 21st century, and to close the race- and wealth-related ownership, employment and participation divides to make possible the fulfillment of our most treasured democratic principles.

To accomplish these goals, Congress needs to think big and act big. The time has come for Congress to adopt a new Telecommunications Act for the Digital Age to update or replace the 1996 Telecommunications Act.

Our current statute has not kept pace with the nation’s rapid transformation to the digital age. The 1996 Act was written at a time when the Internet connected only a few million people, compared to two billion today. Smartphones and apps weren’t yet contemplated, and the term ‘spectrum crunch’ hadn’t even been thought of.

As the Internet has grown, this disruptive technology has thrown traditional assumptions about market definition and competition out the window, and the broadcasting, telephony, cable, satellite and mobile industries have converged.

Yet our current statute classifies these industries under separate and often anachronistic regulatory silos designated “media”, “information services” and “telecommunications services.” Nowhere in the 1996 Act is there a mention of apps, OS providers, handsets, or over-the-top.

And as Marc Morial will discuss in his keynote address at lunch today, there is no longer a national consensus on the meaning of the FCC’s primary purpose – advancing the “public interest, convenience and necessity” as applied to the one-sixth of the economy the FCC touches.

Notwithstanding our outdated statute, wireline, wireless and cable carriers have embarked on the largest public works project the nation has ever seen. Their capital investment in universal broadband infrastructure – $66 billion a year – far surpasses that of the interstate highway system or the national electric grid. And let me place this in context: the principle of equality in America, and avoidance of a digital divide, depends utterly on these massive broadband investments continuing, and even accelerating. These investments in technology help low income and disadvantaged Americans get a fair chance. It is vital to their future. Anything that slows down investment in infrastructure can end up hurting the very people that need it the most. We need companies building infrastructure in our communities, and those who do deserve our support.

Yet even with massive private infrastructure investment, America is still falling behind other countries in broadband technology, innovation and adoption. As a consequence, entrepreneurial and job opportunities are foregone, and millions of young people are failing to attain their full potential. And people of color – 37% of the population who are so often overlooked in telecom policymaking – potentially face a generation of second-class digital citizenship.

Faced with the task of protecting consumers in the evolving telecommunications eco-system, the FCC has too often failed – not because of lack of effort, commitment or comprehension, but rather and simply because the statute allows the Commission to take far too long to rule on the major telecom policy issues of our time. The Commission works at industrial speed while the world is progressing at digital speed.

Consider this:
* Universal service and inter-carrier comp: partly resolved in
2011 – but it took 15 years to get there, and will take at least three more years to completely resolve it.
* The straightforward matter of retransmission consent: 12 years so far, and no end in sight.
* DTV spectrum auctions: probably five to seven more years, even though the FCC’s own National Broadband Plan concludes that we need 500 more megs of commercial wireless spectrum right now to forestall large market spectrum exhaust and the use of price to ration demand. Imagine what spectrum exhaust would do to the ubiquity of wireless – the one technology for which minority adoption runs far ahead of everyone else primarily because wireless is so affordable – a critical factor now that the racial wealth gap has grown to 20:1 for African Americans and 18:1 for Hispanics. Take away wireless affordability and we will have lost our best opportunity to close the digital divide.

And why has the FCC been so agonizingly slow in responding to civil rights issues involving the heritage technologies – radio and television? For example:
* Should the FCC require broadcasters to provide transparent EEO data, as they did from 1971 to 1998? We are now in Year 10 since that issue was fully briefed. No resolution is in sight even though minority employment in English language radio news has dropped from 10% in 1996 to less than 1% today.
* Should some broadcasters, in a hurricane, be expected to offer life-saving information in Spanish? In 2006, the FCC’s Katrina Advisory Committee agreed unanimously that the FCC must act promptly to cure this gaping hole in our nation’s public safety infrastructure. Yet we are now in the seventh hurricane season since Katrina and the FCC has done nothing.
* Should the Commission determine why, in just the past five years, we’ve seen 30 years of progress in minority broadcast ownership virtually evaporate? An unprecedented coalition of 50 national organizations, led by MMTC, has presented 47 race-neutral and nearly unopposed proposals to advance minority broadcast ownership. Yet the FCC has failed to rule on any of them. One proposal, for modest ownership rule waivers when a company incubates a new voice, has been pending in seven dockets since the National Association of Black Owned Broadcasters introduced it in 1990. Another proposal, seeking relaxation of the FCC’s World War I – era broadcast foreign ownership restrictions, has been pending for five years even though foreign investors are eager to provide U.S. minority broadcasters with much-needed access to capital.

This isn’t the individual FCC commissioners’ fault. Instead, it is the fault of an outdated concept of the FCC’s mission and, perhaps, an institutional mindset that has not kept pace with technology and been willing to make needed adjustments. All five of the commissioners, including the three who visited us yesterday, are strongly supportive of diversity. We should all be greatly encouraged by Commissioners McDowell’s and Rosenworcel’s endorsement, at last Tuesday’s House Communications oversight hearing, of the restoration of the 1978 minority tax certificate policy, which Congress ended in 1995 after it had quintupled minority broadcast ownership.

To fully appreciate the consequences of the FCC’s slow speed when it comes to diversity and competition, we can look to history for context and wisdom.

Today we stand today in the middle of the second great economic transformation the nation has ever seen. During the first one, from 1900 to 1970, we evolved from an agricultural economy into an industrial one. And since around 2000, we’ve been evolving from an industrial to a digital economy. This second great transformation is happening so rapidly that it should be nearly complete by 2015.

All of us know what happened to people of color during the great agricultural-to-industrial transformation. As documented in Ira Katznelson’s brilliant 2005 book When Affirmative Action was White, the indicators of equal opportunity went through the floor. Minorities fell farther and farther behind because discrimination had left them unprepared or barred entirely from taking advantage of most of the great opportunities presented by industrialization.

And now, during the industrial-to-digital transformation, history is repeating itself. As the San Jose Mercury News and others have documented, minority employment and entrepreneurship levels in the high tech industry are tiny, and racial disparities are growing wider every day.

Turning this around means reorganizing and empowering the FCC to act rapidly and assiduously to protect consumers and promote social justice. Several new ideas are circulating to reform the FCC – for example:
* A shot clock on rulemakings that would treat Commission inaction as forbearance;
* Adding engineering staff to the offices of each Commissioner, which would do much to accelerate and sharpen FCC rulemakings; and
* Making the National Broadband Plan team a permanent element of the FCC’s staff that updates the Plan every two years to keep pace with disruptive technology and advance social justice.

We need Congress to consider these ideas and many, many more. The best way to do this is comprehensively, in a new Telecommunications Act for the Digital Age.

Here is what such a statute could accomplish:
* It could make the United States the world’s leader in broadband infrastructure, adoption, informed use and consumer protection.
* It could release the FCC from regulatory make-work when disruptive technologies ensure the market’s competitiveness, and it could empower the FCC to take strong steps to protect consumers when the market has failed due to such external factors as systemic racial discrimination and its present effects.
* It could harmonize regulation across the ecosystem of converging and competing industries to ensure technological neutrality and consistent consumer protection.
* It could both expect and enable the Commission to rapidly resolve complex issues while winning the confidence of the appellate courts.
* It could enable the nation to achieve universal broadband access, adoption, and affordability within five years.
* And it could ensure that all Americans, including minorities and women, will participate fully as owners and managers in the media, telecom and high tech industries.

Over the past few months, MMTC has joined with other interested parties to begin exploring the creation of a New Telecom Act Taskforce that would also consider a variety of tools – tax legislation, executive orders, rulemakings, public/private partnerships, and industry best practices. As we move forward, we’ll need everyone in this room to join in fighting to restore the economic health of the United States and to achieve permanent first class digital citizenship for Americans.